Creative Capitalism

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IN THIS SUMMARY

Creative Capitalism focuses on the possibility of expanding capitalism into new areas and using it to solve problems that were previously assigned to charity or to government. In January 2008, Bill Gates gave a speech at the annual World Economic Forum in Davos, Switzerland in which he advocated a new approach for businesses called "creative capitalism." In the context of the speech, creative capitalism seems to mean that large, global corporations should integrate "doing good" into the way they do business. However, precisely what Gates meant by this term is not clear and one of the goals of the book is to explore its possible meanings. Michael Kinsley, the editor of the Creative Capitalism, has taken the online input of numerous business, non-profit, and academic experts and transformed their discussion into a book. Michael Kinsley, in his role of editor, launches the discussion of creative capitalism by raising several points for debate. Kinsley believes that Gates means to say that capitalism can be improved upon. One big question raised by Gates' speech is whether he is seeking an actual change in the nature of capitalism or whether he feels that creative capitalism is a series of techniques that require non-capitalist motivations to work. Selfishness is built into the concept of free-market capitalism. As a result, the idea of making a role for selflessness under the capitalist umbrella seems nearly hopeless. For that reason, Kinsley feels that the most interesting and original idea in Gates' speech was the concept of "recognition" as something that can serve as a substitute for the capitalist incentive of self-interest. Why is it not best if corporations concentrate on maximizing profits, allowing capitalism to perform its alchemy of turning profit maximization into a social good and allowing government and voluntary private charities to fill in the gap? Gates feels that the gaps are too big and that the problems are too formidable for governments and private charities to handle. Several of the experts contributing to the book voiced opposition to the concept of creative capitalism. Concerns include the following: Gates is making false accusations that traditional capitalism fails to help the poor. Gates suggests that the poor do not know their own best interests. Corporate philanthropy is not well suited to eradicate world poverty. Corporate managers have a duty to maximize company profits. Improving democracy would be more effective than creative capitalism. Consumers and financial markets are not motivated by social causes. Many experts, however, also supported the idea of creative capitalism for a variety of reasons. Creative capitalism can address the failures of government. Reform comes from people and organizations that have the resources to create change. Transparency should help address shareholder concerns about creative capitalism. Not all stakeholders are motivated by profit maximization. New business structures may enable creative capitalism. Incentives can be shaped so that when firms pursue profits, they also address the needs of developing countries. Creative capitalism should focus on extending capitalism's reach to new places.The benefits of recognition must be aligned with the creation of social value. Creative capitalist thinking can help private foundations achieve their goals. Creative Capitalism is relevant to a wide variety of people interested in how businesses can advance social causes. Because the book originated in a web-based discussion, the content has the quality of a blog or an online chat. The prose is fairly casual and the organization is a bit chaotic. The book is designed to be read from cover to cover, as the content builds from essay to essay.